At December 31, 2018 and 2017, Cow Co. had 100,000 shares of common stock and 5,000 shares of 5%, $100 par value cumulative preferred stock outstanding. No dividends were declared on either the preferred or common stock in 2018 or 2017. Net income for 2018 was $500,000. For 2018, basic earnings per share was:

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11ea937b_35a1_38c9_a419_55202f7e9060_TB2599_00 Even though no dividends were declared, the preferred dividends are subtracted from the numerator since the preferred shares are cumulative.